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Cinema scams

By Raymond Zhou (China Daily) Updated: 2014-02-26 08:47

However, this is just the tip of the iceberg. Industry insiders reveal it was much worse before computer systems were installed in the nation's cinemas, and of course, before social media websites turned everyone into a potential reporter of such business deceit. As a matter of fact, some cinema investors were not even aware that they had to split their revenue with other parties. "This phenomenon started from the age of planned economy," says Mao Yu, deputy director of the Film Bureau, a branch of the regulating agency.

But it may have turned from guerrilla tactics to larger-scale con games. For group purchases, violators would not even issue tickets, essentially not reporting a single cent of revenue from a whole screening. Since a representative of the group usually deals with the cinema, unless he or she specifically demands a printed ticket for each member of the group, all of them would be in the dark about income reporting from the cinema to the distributor.

Another trick lies in membership dues, which are often collected up front. When a paid member reimburses for a ticket, it may have only the screening room on it, and the exhibitors can choose to credit it to any movie they like, or not to any movie, in which case they pocket 100 percent of the revenue.

Some cinemas would go as far as investing in a separate point-of-sale computer system so that each ticket buyer gets the right ticket, but none of the data shows up on the centralized system. Instead, another set of credible purchase data would be put in the correct system, but with lower attendance.

Both distributors and exhibitors that I spoke to agree that cheating is much less rampant than before, say a dozen years ago, and now is mostly limited to third and fourth-tier cities. China Film Group, the nation's largest film production and distribution company, heads a consortium with several major private companies that hires 1,000 people to monitor cinemas nationwide, and Huaxia, another State-owned company, has a smaller army of 800.

However, there are situations even these sharp-eyed monitors can do little about. For example, if a cinema sells a ticket for 80 yuan, which is normal for primetime, but gives away a free popcorn, it may attribute as much as 60 yuan of the ticket price to the popcorn, leaving only 20 as the ticket price. But it can argue that 20 yuan is the minimum price for this particular film agreed upon by both sides and therefore it does not violate any rule.

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